TMI Blog2016 (8) TMI 263X X X X Extracts X X X X X X X X Extracts X X X X ..... ta B. Biswas, CIT DR ORDER PER PRASHANT MAHARISHI, A. M. 1. This is appeal filed by the revenue against the order of the ld CIT (A)-I, New Delhi dated 01.03.2011 for the Assessment Year 2001-02. 2. The revenue has raised the following grounds of appeal:- 1. The Ld. CIT (Appeals) is not correct in law and facts. 2. The Ld, CIT(A) has erred in both on facts and in law while accepting the Registration charges paid to the State Government for registration of plot and is showing the same under the head of loans and advances recoverable which is a wrong methods of accounting. Similarly, the Electrification Charges were also being recovered in the same manner and treated similarly in the books of account. Such registration of electrification charges can never be recoverable as debtors, loans and advances. These are not the Revenue expenditure and as such they cannot be adjusted against revenue receipts. 3. The Ld. CIT(A) erred in deleting additions made on account of ground rent which was retained by the assessee and had been utilized for the expenses of the firm. 4. Whether the Ld.CIT(A) was justified in deleting the addition made on charging on interes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n view of this ground No. 2 of the appeal is dismissed. 7. Ground No. 3 of the appeal is against deletion of addition on account of ground rent. Ld AR submitted that the disallowance of ₹ 6344/- is covered in favour of the assessee by ground No. 4 in appeal No. 2964/Del/2011 for AY 2003-04 in assessee s own case. Ld DR could not controvert this fact and also could not submit that how the facts are different in this year compared to the decision of coordinate bench in the case of the assessee and others on the same issue. 8. We have carefully considered ground No. 4 in para No. 16 of the appeal of the assessee for AY 2002-03; the coordinate bench has decided this issue deleting the addition of ₹ 25374/- for AY 2002-03. We do not find any change in the facts and circumstances of the case and therefore following the decision of the coordinate bench in the case of the assessee we delete the disallowance of ₹ 6344/- on account of ground rent. In the result ground No. 3 of the appeal is dismissed. 9. Ground No. 4 of the appeal is against deletion of addition on account of interest on late payments of ₹ 125000/-. The ld AR submitted that an identical issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during the course of search and connected survey operations, the assessee has received gift during the year, the details whereof are as under:- SI. No. Annexure details Name of the Donor Relationship with the Donee Date Amount (in Rs.) 1. A-23, S-2, Page No. 1 2 Sh. Jagdish Mangla No Relation 09.12.2000 20,00,000 During the course of search operations, summons was issued to Sh. Mangla but it could not be served upon him as he had expired on 24.06.2002. Statement of his Bank Account was collected and examined. On the examination of bank statement [A/c. No. 988) it was revealed that Sh. Mangla was an entry operator. The entries in this statement were not related to any business dealings of Sh. Mangla as claimed by the assessee but are accommodation entries because whatever amounts are deposited in the account are withdrawn within two/three days leaving a meager balance in the account. Since there is no justification for the gifts made by a person who is not related to the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the return for the A.Y. 2001-02. There is a number and date return by hand and the same is circled. e. The stamp number is illegible in both A.Ys. 2000-01 2001-02. On account of these factors, there is reason to believe that the documents furnished by the assessee in support of his contention are not reliable and accordingly the same are rejected. It is also pertinent to mention that while framing assessment for the assessee HUF in the A.Y. 2001-02, the assessing officer had after conducting an analysis of the gifts received by the assessee and his family members recorded the following observations; (a.) Almost all this gifts have been given in the period between October,2000 and August, 2001. A few stray gifts have been given in the fast two or three months of F.Y. 2002-03. (b.) No gifts have been received before this date and very few gifts have been received after the period in question, (c.) None of the people, who have given gifts to the assessee, are related to the assessee in a manner that there could be said to be any natural love and affection between the donors and the donees, (d.) There is no record of the assessee's hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further submitted that before the Assessing Officer the genuineness of the transaction was not proved and therefore the addition is rightly made. He further stated that ld Assessing Officer has in detail raised several contentions and none of them were dealt with by the ld CIT (A) and therefore the order of the ld CIT(A) may be reversed. Against this ld AR submitted that the issue is squarely covered by the order of coordinate bench in ITA NO.2511/Del/2011 in case of Sh. KK Agarwal for AY 2001-02 wherein the addition is deleted on identical facts and therefore his argument was that the ld CIT (A) has correctly deleted the addition and the issue is covered in favour of the assessee. 17. We have carefully considered the rival submission. There was a search and survey operation conducted in the case of the assessee on 16.03.2007 which continued till 11.05.2007. During the course of search some material were seized and impounded wherein annexure A-23/S-2 page 1 and 2 was found which was dated 09.12.2000 wherein Sh. Jagdish Mangala has given a gift of ₹ 20 lacs to the assessee. During the course of search summons were issued to the donor but could not be served as he passed aw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R that incriminating documents were not found contrary to that ld Assessing Officer has clearly shown that incriminating document was found. In the present case assessment itself has been made on the incriminating documents found during the course of search. Therefore the ratio of that decision in ITA No. 2511/Del/2011 dated 30.09.2015 does not apply to the facts of the case. The ld DR has relied on the decision of Hon ble Delhi High Court in case of CIT Vs. Nowadays Castes Pvt. Ltd. (supra) wherein, Hon ble High Court has held that in those cases there was an evidence and material to show that the share holder company was only a paper company having no source of income but had made substantial and huge investment in the form of share application money and the Assessing Officer has referred to the bank statement and financial position of the recipient and beneficiary assessee and surrounding circumstances Then the three requirements of identification, creditworthiness and genuineness of the transaction have to be tested not superficially but in depth having regard to the human probabilities and normal course of human conduct. In background the above decision of Hon ble Delhi High C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relationship between the assessee and Bhupinder Kumar and also to produce a copy of assessment order made by the tax authorities of the country in which Bhupinder Kumar was residing. These details were required to establish and show the genuineness of the transaction relating to the gift. The Assessing Officer has recorded that this information was not furnished. The Assessing Officer has further recorded that apparently there was no blood relationship between the donor and the assessee-donee and the donor had not been produced for examination. The capacity of the donor was also not proved and established. Accordingly, the Assessing Officer held that the medium of gift was a conduit for funnelling his own undisclosed money. The Commissioner of Income-tax (Appeals) has only relied upon section 5(1)(ii)(b) of the Gift-tax Act, 1958, to hold that the addition could not be sustained. He, however, accepted that the relationship between the donor and the donee had not been established. As far as production of assessment order in respect of the donor was concerned, it was observed that Bhupinder Kumar was not liable to be taxed in India and, therefore, production of assessment order was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow the genuineness of the transaction by establishing the identity of the person from whom the payment was received, the source of payment, which necessarily need not be confined only to the details of the bank account from which payment was made but also corroborating and the surrounding circumstances. This has always been the legal position, even prior to the insertion of section 68 of the Act. It was a well-accepted principle that income/cash credits which are not satisfactorily explained might be assessed as income. Even long prior to the introduction of section 68 in the statute book, courts have held that where any amount was found credited in the books of the assessee in the previous year and the assessee offered no explanation about the nature and source thereof or the explanation offered was in the opinion of the Assessing Officer not satisfactory, the sums so credited could be charged to be taxed as income of the assessee for the relevant previous year. Section 68 was inserted in the Act only to provide statutory recognition to a principle which had been clearly adumbrated in judicial decisions. The whole history of the introduction of sections 68 to 69D of the Act and th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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